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Technically, Friday broke the daily trend and momentum. However there were key volume profile areas below that were tested and have for the time being provided support.
Support 1626.25-1628.00
Mid-Point: 1641.00-1643.50
Resistance: 1657.00-1659.00
Big number at 10am EST today, are good numbers good or bad for the market now? No need to re-invent the wheel just manage your risk prior to the release.
Support 1638.00-1640.00
Resistance 1652.75-1655.00
Here is the chart:
Should be a great day today. See you all after the close
It looks like a lot of the excitement heading into yesterday’s session has started to die down. The technical levels are relatively clear heading into today. Two notes about them. A lot of resistance has been built up prior to primary resistance, notably around the Volume point of control from yesterday. The main support level today is dealing with down momentum from the overnight session and in a larger than usual gap situation. Indicating that the smart move would be to lock in profits prior to the full gap fill. (more…)
Back in April the market experienced a similar sell off for 63 points. What happened after the initial major down day was a few days of very large gaps (10pts and greater), before the market settled down and eventually resumed the up trend. Also in late February the markets went through a similar increase in volatility before stabilizing and continuing to the upside.
Ultimately there was shock from Bernanke’s comments about toning down QE and last night the Nikkei made a splash of its own. Which has put the market into a state of increased volatility and uncertainty in the short term. Ultimately there are two scenarios likely to unfold; the market remaining in a state of relatively high volatility, leading into a down trend. Or the market will stabilize and slowly revert to historically lower levels of volatility, possibly leading to further upside. Either way, we can expect a large trading range to develop over the coming days with plenty of opportunities to be both long and short.
My expectation today is for a gap size of roughly 15pts, which puts the gap fill below a 40% probability of filling. Typically expansion leads to contraction so I wouldn’t expect much today. I am going to sit today out, see how the market behaves around already established key levels and then proceed from there.
Heavy news schedule today, 10am, 10:30am and 2pm are the key times for news. Also, Bernanke is peaking today which should add additional ‘headline risk’ for today’s session. (more…)
